Minimum wages, student loan notices, EFRBS, SSP, NevadaMonday, September 26th, 2011
The new National Minimum Wage (NMW) rates take effect from 1 October – or do they? The UK legislation actually requires the new rates to be paid for the first “pay reference period” that starts on or after 1 October. So, for example, with 1 October this year falling on a Saturday, if a weekly-paid employee’s pay week runs from Monday, 26 September to Sunday, 2 October, the new minimum rates do not apply to that week; they first apply to the pay week starting on Monday, 3 October.
One of our news items this week is about the NMW. Do you offer “work experience” placements and, if so, do the individuals receive at least the appropriate NMW rate? But surely the NMW doesn’t apply to work experience? Please read the new Business Link guidance!
Staying with the NMW, I have been on “vacation” in theUS– in case you didn’t guess – most of the time inNevada. It seems to me thatUSpayroll is very complex, but for quite a different reason than UK payroll. We have national legislation – a single set of rules (with just few exceptions) for employees wherever they live – but our legislation is always changing. The level of change in the US is minimal but the complexity arises from the federal nature of legislation. In addition to federal income tax withholding, most states set their own income tax rates, and many counties and cities also impose additional income tax liabilities. Imagine running a payroll with employees in all 50 states, each with tax withholding rules, minimum pay rates, workers’ compensation deductions and overtime rules that differ according to where your employees live!
Nevada is one of the few states that has no state income tax (personal or corporate) – guess where most of it revenue comes from – and sets a minimum wage rate of $8.25, or $7.25 if the employer also provides health benefits. Overtime has to be paid at time and a half when an employee works more than 40 hours in a week or 8 hours in a day. Tips cannot be counted towards meeting the minimum wage. Those are a few of the rules for one state – and there are 49 others, each with its own rules.